Fraud Alert: For Profit Colleges

For-profit colleges are big business; they exist in the first instance to make money and they have been a haven for fraud, waste and wrongdoing.

What is worse is that many of these colleges exist only because their students take out government backed loans to pay hefty tuition. Hence, these schools are riding on the back of taxpayer dollars! At a time when education dollars are scare, it is important to crack down on educational spending fraud, waste and abuse. Already, a number of these schools have paid hefty damages to the government under the False Claims Act.

If you are a student or employee of a for profit college, you should be concerned if you see any of the following conduct:

  • A high number of students dropping out and very low graduation rates
  • Graduates having a hard time finding jobs despite representations of employment upon graduation
  • Fees or gifts given to those who refer or recruit students
  • Financial instability at the institution
  • Harassment, hostile environment or discrimination with regard to employees or students

For profit colleges are in the business to make money; if you see wrongdoing, it may be time to contact an attorney.

If you have information regarding fraud or wrongdoing involving for profit colleges – contact our whistleblower attorneys to claim a free, no-obligation case review today to learn your options.

Education Fraud

Each year the government and the states spends billions of dollars on education. Some of this money comes in the form of direct subsidies and some comes in the form of government backed loans. Education is not just big business for charter schools and for profit colleges; even purportedly reputable institutions are establishing new kinds of degree programs which are often no more than income generators.

Many of these institutors know that with government backed loans, they can attract students who will not be thinking about the day that he loan will come due. For unwitting borrowers,  the day of reckoning comes when the loan is due but – in contrast to yesteryear when education was a solid investment —  the return on the newer educational products that are being foisted on the market is not enough to cover the loan.

Students, faculty, and administrators could keep their eyes open for the following:

  • Compensating individuals or entities who recruit students
  • Low graduation rates
  • Low placement or broken promises about placement
  • More than 90 percent dependence on government loans for revenue
  • Misrepresentations as to the educational offerings and the quality of the programs

The U.S. Department of Education (“DOE”) provides billions of dollars in funding to help students participate in education at public, charter, private non-profit, and private for-profit schools.  Education fraud occurs when government dollars have been fraudulently obtained or used in the education sector. In order to receive government funding schools and students must meet and adhere to certain criteria and federally regulated standards. When schools or school employees violate the Higher Education Act (HEA) or other federally regulated standards in order to increase profits they are commiting fraud. 

Education fraud can be very complicated and the types of fraud involved vary greatly. The U.S. Department of Education, Office of Inspector General encourages people to report any suspected fraud or abuse involving education funds or programs.  The perpetrators of violations of Federal regulations pertaining to education programs or funding can include schools, employees, student recipients of funds, contractors, lending institutions, collections agencies, or public officials.  The types of violations that constitute education fraud are just as varied, from predatory loan practices on behalf of lenders to sham university staff positions to misrepresenting student credentials.  

The price of education fraud eventually burdens itself on taxpayers. The Office of Inspector General encourages people to speak up and blow the whistle against fraudulent practices in education that ultimately undercut young people trying to gain access to education.